Re: Small stores and stocking inventory

Posted by JDseller on May 17, 2011 at 17:41:27 from (208.126.196.144):

In Reply to: Small stores and stocking inventory posted by northeast puller on May 17, 2011 at 03:14:47:

A good friend of mine used to run a local auto parts store. He was an independent store. He had to buy so many dollars just to get daily delivery. The last two years he was in business he made over $50,000 profit each year but had to borrow money to pay his taxes. His inventory value grew faster than his profit did. He did not have any cash money as it was all tied up in inventory.
Another thing he used to do. If a part went up in price he would wait until he sold the one he had in stock at the old price and then mark up the new one when it came in. That made him lose money over the year as his inventory changed value. He should have changed his price as soon as it went up.
Small businesses make small margins after paying all of their bills. The locals pay taxes and employ people. The chains draw people to their "big" stores that they often get tax abatements on. I have seen the property taxes paid by the local small stores be larger than Wally world.

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